Rebound in industrial production reverses sluggish trend

New figures for industrial production in December show output in the sector rebounded strongly on weak out-turns in the previous three months.

Industrial production expanded by 8.5 per cent in December on the previous month, figures from the Central Statistics Office show.

In September a precipitous decline in production was recorded, driven mainly by the pharmaceutical sector.

The monthly decline in output in the pharmaceutical sector in September, at 37 per cent, was the third-highest such fall since the mid-1990s.

This provided worrying evidence that the expiration a year ago of patents on some medicines made in Ireland was having a major impact on the pharmaceutical industry.

Davy stockbrokers chief economist Conall MacCoille described the December figures as “something of a relief”.

“The threat of a spectacular headline-grabbing contraction in Irish gross domestic production in the final quarter of 2012 , driven by the pharmaceutical patent cliff, appears to have receded,” he said.

New business growth

Production over the course of 2012 was down 1.7 per cent on 2011.

Separately, a survey published yesterday suggested that in January the Irish services sector expanded at its fastest pace since August 2007.

According to the NCB Ireland services purchasing managers’ index, the headline reading stood at 56.8 for January, up from 55.8 in December.

Any reading above 50 indicates growth. New business growth remained “healthy”, with respondents reporting an improvement in domestic and external markets in January.

“We are encouraged to see that the rate of growth in new exports stands at the highest level since the series began in June 2002,” said NCB chief economist Philip O’Sullivan.

“These positive dynamics are encouraging employers in the services sector to take on more staff, with the employment index increasing at its fastest rate since Q1 2007.”

He added that he expected “the recent positive trends to continue over the coming months”.